Atlantic City Tries to Shake Off Sandy

Hurricane Sandy spared Atlantic City the terrible physical damage many feared, but the financial hit is considerable. City leaders have fanned out to try to spread the word that Atlantic City isn't the disaster zone some in the media have portrayed it as. Alexandra Berzon has details on The News Hub. Photo: AP.

By

Alexandra Berzon

Updated Nov. 10, 2012 5:25 p.m. ET

Atlantic City isn't a disaster zone. That's the message local leaders are trying to spread this week in the wake of Hurricane Sandy, which spared the gambling enclave serious physical damage but is hurting the city's economy when it was already struggling.

Gambling and other leisure business has been cut in half from what it would otherwise be since casinos started to reopen last weekend, according to local officials, while two big conventions have canceled. The result is at least $55 million in lost business, executives say.

"We encourage everyone to come and see for themselves that this is a place that is ready to move forward," Liza Cartmell, president of the marketing group Atlantic City Alliance, said on a conference call Friday with journalists.

When superstorm Sandy made landfall last week, Atlantic City was dead center, at a time when the city's 12 casinos were already suffering amid growing competition from new casinos in Maryland, Pennsylvania and New York.

Television stations had reporters positioned in town as the storm approached, blasting out images of heavy flooding. Later, a torn-apart piece of the city's historic boardwalk became a recurring image of Sandy's destruction.

ENLARGE

Local officials say TV coverage has exaggerated the damage to the city's casinos. Above, an Oct. 30 image.
Reuters

Casinos were forced to close for five days, but otherwise damage was limited in the casino areas, executives say. The biggest damage appeared to be at Harrah's casino, where the rooftop will require several million dollars in repairs, though this hasn't stopped the casino from reopening.

The boardwalk that was torn out was in an inlet and away from the casino area. It was already slated for demolition and closed to foot traffic, officials say.

But executives say that the images of the city's destruction have had misplaced consequences.

"Every broadcaster that wants to be empathetic to the plight of the Jersey Shore, the asset that comes to mind is the Atlantic City boardwalk, and they've been making references without having proper perceptions," Ms. Cartmell said.

Her group has been aggressive in trying to spread the word that Atlantic City's damage isn't as bad as it appeared on TV. The city has hosted news conferences on the boardwalk to emphasize its stability and hosted trips to bring in journalists, as well as arranged executive interviews with Philadelphia television stations. Atlantic City has tweaked its advertising campaign, "Do AC," to "Can Do AC," to emphasize the spirit of recovery. Caesars EntertainmentCorp. Chief Executive Gary Loveman appeared on "CBS This Morning" Thursday.

Based on the television coverage, Mr. Loveman said, "People tend to think, 'That's not really where I first imagine going for vacation activity or leisure activity.' "

Continuing disruptions elsewhere on the East Coast appear to be causing ripple effects in Atlantic City. Nine group meetings, including two large conferences—a teachers' group and a gathering of New Jersey municipal employees—were canceled in the wake of the storm, which was a $30 million hit to the city. They have rescheduled for next year. Other travelers are finding it difficult to travel there due to gas shortages.

Hotel occupancy this week was around 30% to 40%, instead of the 80% to 90% expected, said John Palmieri, executive director of the Casino Reinvestment Development Authority. The impact of the storm, which hit in the final days of October, appeared in October market numbers that were released Friday, with car traffic to Atlantic City down 22% from a year earlier, compared with a 1% increase for the year. Gambling revenue was down 20% in October, but that largely continues long-term downward trends. Gambling revenue has declined 48 of the last 50 months, JP Morgan analyst Joseph Greff pointed out Friday in a note.

But Don Marrandino, who heads up Caesars' four Atlantic City casinos, said business is beginning to perk up. He pointed to high occupancy this weekend.

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